ABSTRACT
In the process of expanding domestic demand and initiating new economic growth, the important issue for China has been the selection and coordination of appropriate policies and instruments. From 1996, in the late phase of the successful “soft landing,” the central government began to relax its policies on financing. In fact, to increase the strength of economic growth initiatives, the central government has implemented, for the past several months, a more aggressive fiscal policy alongside its monetarist approach. A stable price regime does not mean stagnant prices, nor does it mean “zero” inflation. It is a policy by which price fluctuation is regulated in accordance with the cyclical development of the economy, so that it will not be consistently deflationary or inflationary. Basic price stability should be the main policy for the adjustment of the general price level.
